FUTURES SHARPLY DOWN, RATTLED BY CYPRUS WORRIES

U.S. stocks dropped on Monday at the open as a divisive bailout plan for Cyprus knocked confidence in banks and provided investors a reason to lock in profits from the recent rally.

The Dow Jones industrial average was down 97.11 points, or 0.67 percent, the Standard & Poor’s 500 Index was down 12.24 points, or 0.78 percent, at 1,548.46, and the Nasdaq Composite Index was down 34.82 points, or 1.07 percent.

** BANK OF AMERICA CORP, $12.38, down 1.5 pct (0941 ET)

** CITIGROUP INC, $46.14, down 2.2 pct (0941 ET)

** JPMORGAN CHASE & CO, $49.14, down 1.8 pct (0941 ET)

** MORGAN STANLEY, 22.92, down 3 pct (0942 ET)

** WELLS FARGO & CO, $37.80, down 1 pct (0942 ET)

U.S. bank stocks were headed for a lower open after an unusual bank bailout proposal for Cyprus threatened to trigger fresh turmoil in the euro zone. News that Cyprus would have to tax depositors as part of the bailout plan sparked fears of a run on some banks in the region, driving down the euro and other riskier assets such as Asian shares and base metals.

** PALOMAR MEDICAL TECHNOLOGIES INC, $13.29, up 6 pct (0940 ET)

** CYNOSURE INC, $28.59, up 05 pct (0940 ET)

Cynosure Inc said it would buy Palomar Medical Technologies Inc, which makes lasers for cosmetic procedures, for about $294 million in cash and stock. Palomar shareholders will get the equivalent of $13.65 per share, a premium of 8 percent to the stock’s closing price on Friday.

The company which designs chipsets for video and broadband multimedia applications, cut its outlook for the first quarter. Entropic said revenue would be hurt by a change in deployment plans for some set top boxes by a U.S. pay-TV service provider.

** GLU MOBILE INC, $3.53, up 6 pct (0938 ET)

Northland Capital Markets raised its rating on the mobile games maker’s stock to “outperform” from “market perform”, saying the company has substantially improved its hit rate for new games.

** CARNIVAL CORP, $34.01, down 3 pct (0938 ET)

The cruise operator, grappling with a series of recent headline-grabbing mishaps involving its ships, said on Friday it returned to profitability in the latest quarter but cut its revenue and profit forecast for the year.

Carnival cited weakness in Europe and pricing promotions aimed at attracting customers for the lowered forecast

** MICRON TECHNOLOGY INC, $9.07, down 3 pct (0937 ET)

Susquehanna downgraded the chipmaker’s stock to “negative” from “neutral” and cut its price target on the stock by $1 to $8. The brokerage said the company’s second-quarter results would likely beat analysts’ estimates, but the expectation has already been priced into its stock.

** CONSTELLATION BRANDS INC, $47.15, up 3.2 pct (0937 ET)

The U.S. Justice Department and beer giant Anheuser-Busch InBev, embroiled in a battle over whether AB InBev can expand its stake in Mexico’s Grupo Modelo, asked a court on Friday to extend a delay in the court fight as they hold settlement talks.

Constellation Brands is slated to buy Modelo’s U.S. distributor, Crown Imports, under the same deal.

** STMICROELECTRONICS NV, $7.88, up 3 pct (0936 ET)

** ERICSSON, $12.94, down 2.4 pct (0936 ET)

STMicroelectronics and Ericsson will close their loss-making mobile chip joint venture ST-Ericsson by dividing parts of the business between them and shutting the rest with the loss of about 1,600 jobs.

The announcement ends months of speculation about the future of ST-Ericsson, which has been hit by a big drop in orders from top customer Nokia as the phone maker lost market share to Apple and Samsung.

** DEX ONE CORP, $1.96, down 7 pct (0935 ET)

** SUPERMEDIA INC, $4.04, down 8 pct (0935 ET)

The directories publishers have filed for bankruptcy after failing to win the full support of senior secured lenders for a change to a credit agreement that was needed to complete their planned merger. (Compiled by Pallavi Ail in Bangalore; Editing by Sreejiraj Eluvangal)